Homeowners eligible for a tax break under the Homestead Exclusion Program need to act fast if they haven’t already applied for it. The last date to apply for the Pennsylvania property tax break is March 1. Eligible homeowners will receive the credit on their tax bill in the coming year.
Homestead Exclusion Program: who qualifies for the credit?
In 2004, Governor Rendell signed the Homeowner Tax Relief Act. The program allows school districts to lower property taxes by reducing taxpayers’ property tax bills through a process officially called the “homestead or farmstead exclusion.”
The Homestead Exclusion Program allows homeowners to save on property tax on their primary residence. Compared to those who live in the suburbs or rural areas, the tax break is higher for city homeowners under the Homestead Exclusion Program.
To qualify for the Pennsylvania property tax break, a person needs to be a homeowner, and the property in question must be their primary residence. The relief is not available for properties used solely for rental or business purposes. If the property is used for both residential and non-residential, the relief is available only on the portion used for domicile by the owner.
Under the homestead or farmstead exclusion, the property’s assessed value is reduced by the same amount before the calculation of the property tax. The credit amount will appear on the tax bill as a separate line item below the value of the property. The credit amount is then subtracted from the original value to come up with the new net assessment.
“The actual property tax reduction will be the difference between the tax rate applied to the new reduced assessment and the tax rate applied to the unreduced assessment,” reads one of the FAQs of the Homestead Exclusion Program.
Pennsylvania property tax break: how to apply
Eligible homeowners need to submit their application for the Pennsylvania property tax break by Friday to the County Board of Assessment. Although homeowners will be allowed to submit the forms after the March 1 deadline, the forms won’t be processed until the next enrollment period.
The deadline is unlikely to be extended as the governor lacks the authority to approve the extension through an executive order. Separate legislation is required to make changes to the application deadline.
Those eligible for the break should have received the form in the mail. If you haven’t received it or have misplaced it, you can make a print copy from this link. Alternatively, homeowners can also contact their county assessment office to get a copy of the form.
Applicants will receive a notice via mail from the County Homestead Office informing them whether or not their application has been approved. An applicant may appeal to the Board of Assessment Appeals for a review if they disagree with the assessor’s decision.
